July 6, 2022

The Fear of a Toxic Rerun

The plant, which would be the world’s biggest refinery for rare earths — metals crucial to the manufacture of a wide range of technologies including smartphones, smart bombs and hybrid cars — has also become the target of protesters who fear that the plant will leak radioactive and toxic materials into the water table.

Weekly demonstrations have drawn crowds since March, and someone recently threw gasoline fire bombs at the gated home of a senior project manager.

Some risks had been expected from the plant, which would refine rare earth ores into manufacturing-grade materials. Although rare earths are not radioactive, in nature they are usually found mixed with thorium — which is.

That is why the Lynas Corporation, an Australian company, promised three years ago to take special precautions when it secured the Malaysian government’s permission to build the sprawling complex here on 250 acres of reclaimed tropical swampland. It would be the first rare earth processing plant in nearly three decades to be finished outside China, where barely regulated factories have left vast toxic and radioactive waste sites.

Lynas has an incentive to finish the refinery quickly. Export restrictions by China in the last year have caused global shortages of rare earths and soaring prices. But other companies are scrambling to open new refineries in the United States, Mongolia, Vietnam and India by the end of 2013, which could cause rare earth prices to tumble.

Lynas officials contend that the refinery being built here is safe and up to industry standards, and say that they are working with its contractors to resolve their concerns.

“All parties are in agreement that it is normal course of business in any construction project for technical construction queries to be raised and then resolved to relevant international standards during the course of project construction,” wrote Matthew James, an executive vice president of Lynas, in an e-mail on Wednesday night.

Trading in Sydney of Lynas shares was halted on Thursday morning pending a company announcement. Malaysia’s ministry of international trade and industry scheduled a news conference late Thursday morning and was expected to announce what changes in the project would be required by the government after a review by a team from the International Atomic Energy Agency.

But the construction and design may have serious flaws, according to the engineers, who also provided memos, e-mail messages and photos from Lynas and its contractors. The engineers said they felt a professional duty to voice their safety concerns, but insisted on anonymity to avoid the risk of becoming industry outcasts.

The problems they detail include structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses. Ore mined deep in the Australian desert and shipped to Malaysia would be mixed with powerful acids to make a slightly radioactive slurry that would be pumped through the tanks, with operating temperatures of about 200 degrees Fahrenheit.

The engineers also say that almost all of the steel piping ordered for the plant is made from standard steel, which they describe as not suited for the corrosive, abrasive slurry. Rare earth refineries in other countries make heavy use of costlier stainless steel or steel piping with ceramic or rubber liners.

The engineers also say that the concrete tanks were built using conventional concrete, not the much costlier polymer concrete mixed with plastic that is widely used in refineries in the West to reduce the chance of cracks.

Documents show that Lynas and its construction management contractor, UGL Ltd. of Australia, have argued with their contractors that the cracks and moisture in the concrete containment walls are not a critical problem.

Article source: http://www.nytimes.com/2011/06/30/business/global/30rare.html?partner=rss&emc=rss

Supplies Squeezed, Rare Earth Prices Surge

World prices have doubled in the last four months for rare earths — metallic elements needed for many of the most sophisticated civilian and military technologies, whether smartphones or smart bombs.

And this year’s increases come atop price gains of as much as fourfold during 2010.

The reason is basic economics: demand continues to outstrip efforts to expand supplies and break China’s chokehold on the market.

Neodymium, a rare earth necessary for a range of products including headphones and hybrid electric cars, now fetches more than $283 a kilogram ($129 a pound) on the spot market. A year ago it sold for about $42 a kilogram ($19 a pound).

Samarium, crucial to the manufacture of missiles, has climbed to more than $146 a kilogram, up from $18.50 a year earlier.

While the price inflation is a concern to manufacturers, consumers in many cases will barely notice the soaring cost of rare earths. Even though the materials are crucial to the performance of everyday equipment like automotive catalytic converters and laptop computer display screens, rare earths are typically are used only in trace quantities.

One exception is the Toyota Prius hybrid car, whose manufacture uses a kilogram of neodymium.

Toyota has been raising prices for the Prius, but has cited demand for the car and economic conditions. While acknowledging that rising prices for raw materials in general have affected the company’s overall financial results, Toyota has declined to provide a breakdown of the role of rare earths. (Production problems stemming from the Japanese earthquake and tsunami have also crimped supplies of Prius cars, which are made only in Japan.)

The high prices for rare earths reflect turmoil in the global industry that mines and refines them. China, which controls more than 95 percent of the market, has further restricted exports so as to conserve supplies for its own high-tech and green energy industries. That is despite the World Trade Organization’s ban on most export restrictions.

Meanwhile, an ambitious effort to open the world’s largest rare earth refinery in Malaysia, which had seemed certain to begin operating by this autumn, is tied up over regulatory reviews of the disposal plans for thousands of tons of low-level radioactive waste the plant would produce annually. Public opposition to the refinery is evident in the weekly protest demonstrations now being held.

At the same time, Japanese companies are finding it harder than originally hoped to recycle rare earths from electronics and to begin rare earth mining and refining in Vietnam.

Although rare earths are crucial to the supply chains of some of the world’s biggest manufacturers, the industry that mines and refines them has long been characterized by small, entrepreneurial companies. Lately, though, soaring prices have contributed to industry consolidation.

Last month, for example, Solvay, a big Belgian chemical-industrial corporation announced that it would pay $4.8 billion to acquire Rhodia of France, a technological leader in making complex chemicals based on rare earths.

That same day, April 4, Molycorp, the only American company currently producing rare earths, said it had paid $89 million for a more than 90 percent stake in Silmet of Estonia, a much smaller company that is Rhodia’s only European rival in rare earth processing.

In Malaysia, where the giant rare earth refinery is under construction near the eastern port of Kuantan,
regulators are delaying approval for an operating permit amid public concern about naturally occurring low-level radioactive contamination of the rare earth ore, which will be mined in Australia.

Raja Dato Abdul Aziz bin Raja Adnan, the director general of the Malaysian Atomic Energy Licensing Board, said the board had asked the Lynas Corporation of Australia, which is building the refinery, to provide additional documentation before accepting its application for an initial operating permit. It will take up to six months to review the application, Raja Adnan said, and Lynas will not be allowed to bring any raw material to the plant until a permit is issued.

But Nicholas Curtis, Lynas’s executive chairman, said that he believed the company could obtain the necessary approvals before September and that his company was sticking to its plan to begin feeding Australian ore into the Malaysian refinery’s kilns by the end of that month.

The Malaysian government also announced last week that it would appoint a panel of international experts to review the safety of Lynas’s plans. The company said it welcomed the move.

But Fuziah Salleh, an opposition legislator who represents downtown Kuantan and has been leading weekly protests, is mistrustful.

“The people’s concerns are that the independent panel will be formed by the government to prove that they are right,” she wrote in an e-mail message.

Toyota Tsusho, a materials purchasing unit of the Toyota Group, has separately encountered complex local regulations as it seeks to open rare earth mining and processing operations in Vietnam. The project was announced last October during a Chinese embargo on rare earth shipments to Japan. Takeshi Mutsuura, a spokesman, said that Toyota Tsusho now hoped to reach a contract in Vietnam this summer and start production in early 2013.

Article source: http://feeds.nytimes.com/click.phdo?i=ec0a4e808d6fa4187b2206b2fece1bb2